The American Dream
The term “American Dream” emerged during the depths of the Great Depression in 1931, coined by writer James Truslow Adams in his book “The Epic of America.” He described it as a “dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” It typically refers to a set of achievements such as buying a home and car, getting married, having children, and economic prosperity. However, the economic dynamics of the past year have impacted the realization of most of these achievements due to ongoing inflation, rising mortgage interest rates, and skyrocketing home prices, making the modern American Dream out of reach for millions of Americans. Today, the American Dream costs $3,455,305, which is the estimated lifetime cost of common achievements including marriage, two children, homes, healthcare, cars, and education.
Bank Failures
Banks were supposed to be boring, but they weren’t in 2023. The failures of Silicon Valley Bank, Signature Bank, and First Republic Bank shook the financial world and sent depositors searching for a better understanding of how to protect their money and whether it was safe. Our readers became experts on the role of the Federal Deposit Insurance Corporation, how the Treasury Department supports the banking industry, and the real risks of how banks invest their money and where.
Artificial Intelligence
The future became a hot topic this year as artificial intelligence (AI) emerged as the standout investment theme of the year, and one of the most exciting, controversial, and frightening technologies we’ve faced over the decades. AI has become a dominant force in every industry it touches, and many of them. Our readers learned about how it works, the opportunities it presents if used effectively, the risks it poses, and of course, how to invest in its potential. It’s no surprise that AI was also our readers’ top pick for the term of the year 2023.
Certificates of Deposit
2023 offered a true option for savers seeking their safety nets, and certificates of deposit (CDs) were among the most popular products this year. Banks offered higher yields to keep pace with the Fed’s rate-hike campaign, and our readers learned everything they could about how CDs work and which banks offered the highest returns at that time.
Inverted Yield Curve
This divergence in the U.S. Treasury market continued throughout the year, causing threats of recession and a bear market. We didn’t experience either, but the inverted yield curve of the two-year and ten-year U.S. Treasury bonds was just one of many divergences in the Treasury market that confused investors in 2023. With economic uncertainty, an inverted yield curve may be the new normal for a time.
Debt Ceiling
Unfortunately, threats of a government shutdown returned as the U.S. government neared the debt ceiling once again, just as members of Congress failed to reach an agreement on approving continuing resolutions to fund the government until the last minute. They did, but it cost the Speaker of the House his job, and the issue was pushed to next year, ensuring we will see this term again next year.
Treasury Bonds
The innovation of Secretary Alexander Hamilton garnered much attention in 2023 as Treasury prices entered their third year of a bear market, and the public’s appetite for them was tested. The Federal Reserve’s reduction of its portfolio also led to the reinjection of trillions of dollars’ worth of Treasury bills (T-Bills) back into the market as part of its quantitative tightening process. This disruption in what was traditionally thought to be the safest and most widely held asset on the planet drove our readers to learn more about how the Treasury market actually works and how to benefit from the higher yields these government bonds offer.
BRICS
With
The continued decline of the U.S. Treasury market and escalating tensions between the United States and Russia, as well as the United States and China, have increased discussions on the growing dominance of the BRICS nations: Brazil, Russia, India, China, and South Africa as global powers. The dominance of the U.S. dollar has also come under scrutiny as OPEC and its allies suggested moving away from the dollar as the default currency in oil markets. The rise of BRICS has been a popular topic among our readers and is likely to continue for years to come.
Assumable Mortgages
The rise of the 30-year fixed mortgage to over 8% this year has made home buying impossible for many Americans. The housing market in the United States has been in a deep freeze throughout 2023, forcing buyers and sellers to think creatively about how to make deals, including the use of assumable mortgages, transferring the current mortgage from the seller to the buyer as part of the deal. If interest rates are expected to remain high for longer, this clever strategy is predicted to become more popular next year.
Fraud
This criminal activity seems to always find its way into the most searched terms by readers each year. The charges against Donald Trump by a court in Georgia made headlines this year, but there are several other prominent cases that have caught our readers’ attention. SHEIN, the popular online fashion platform, was sued for fraud by three independent designers who claim the company stole their designs.
Source: https://www.investopedia.com/2023-investopedia-terms-of-the-year-8409161
Leave a Reply